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Author: Xiaoxiao Song
Publisher:
ISBN:
Category : Economic forecasting
Languages : en
Pages : 181
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Book Description
The globalization of business and finance has led to the adoption of International Financial Reporting Standards (IFRS) in more than 100 countries, and numerous studies have examined the consequences of IFRS adoption in these countries. Currently, however, U.S. domestic issuers are not required to use IFRS in preparing their financial statements, which makes the study of potential IFRS adoption effects on U.S. domestic issuers difficult. My dissertation uses a unique sample of foreign private issuers that are cross listed in the U.S. and are allowed to use IFRS for their financial statements, so that I can investigate the effect of IFRS adoption on analyst forecast behavior and analyst information precision in the U.S. By comparing this IFRS adoption sample group with another group of U.S. foreign private issuers that use U.S. GAAP for their financial statements, my dissertation examines and answers three research questions. Firstly, whether there are any differences in analyst forecast behavior, such as analyst following, analyst forecast accuracy, and analyst forecast dispersion, between the IFRS group and the U.S. GAAP group. Secondly, whether analyst public and private information precision are affected by foreign private issuers' IFRS adoption. And lastly, whether the IFRS adoption effect is moderated by industry characteristics (whether or not IFRS is the dominant accounting standard in the issuer's industry) and moderated by the level of rule of law in the issuer's home country. Results show that compared with the U.S. GAAP group, the IFRS group generally has lower analyst following, lower analyst forecast accuracy, higher forecast dispersion, and less precise public information precision. In addition, the negative effect of foreign private issuers' IFRS adoption on analyst forecast accuracy is weaker when the issuer's industry is in IFRS dominant industry, while the negative effect of IFRS adoption on analyst following is stronger when the issuer comes from a country with strong rule of law. In essence, my dissertation sheds light on the debate surrounding potential IFRS adoption in the U.S by providing evidence that to some extent, foreign private issuers' IFRS adoption is related to unfavorable analyst forecast behavior and information precision in the U.S. capital market.
Author: Xiaoxiao Song
Publisher:
ISBN:
Category : Economic forecasting
Languages : en
Pages : 181
Get Book Here
Book Description
The globalization of business and finance has led to the adoption of International Financial Reporting Standards (IFRS) in more than 100 countries, and numerous studies have examined the consequences of IFRS adoption in these countries. Currently, however, U.S. domestic issuers are not required to use IFRS in preparing their financial statements, which makes the study of potential IFRS adoption effects on U.S. domestic issuers difficult. My dissertation uses a unique sample of foreign private issuers that are cross listed in the U.S. and are allowed to use IFRS for their financial statements, so that I can investigate the effect of IFRS adoption on analyst forecast behavior and analyst information precision in the U.S. By comparing this IFRS adoption sample group with another group of U.S. foreign private issuers that use U.S. GAAP for their financial statements, my dissertation examines and answers three research questions. Firstly, whether there are any differences in analyst forecast behavior, such as analyst following, analyst forecast accuracy, and analyst forecast dispersion, between the IFRS group and the U.S. GAAP group. Secondly, whether analyst public and private information precision are affected by foreign private issuers' IFRS adoption. And lastly, whether the IFRS adoption effect is moderated by industry characteristics (whether or not IFRS is the dominant accounting standard in the issuer's industry) and moderated by the level of rule of law in the issuer's home country. Results show that compared with the U.S. GAAP group, the IFRS group generally has lower analyst following, lower analyst forecast accuracy, higher forecast dispersion, and less precise public information precision. In addition, the negative effect of foreign private issuers' IFRS adoption on analyst forecast accuracy is weaker when the issuer's industry is in IFRS dominant industry, while the negative effect of IFRS adoption on analyst following is stronger when the issuer comes from a country with strong rule of law. In essence, my dissertation sheds light on the debate surrounding potential IFRS adoption in the U.S by providing evidence that to some extent, foreign private issuers' IFRS adoption is related to unfavorable analyst forecast behavior and information precision in the U.S. capital market.
Author: Matthias Demmer
Publisher:
ISBN:
Category :
Languages : en
Pages : 61
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Book Description
This study examines whether the improvement in analyst forecast accuracy around mandatory IFRS adoption is associated with the improvement in the accuracy of financial statement-based forecasts. We find significant out-of-sample improvement in financial statement-based forecast accuracy around mandatory IFRS adoption and significant improvement in analyst forecast accuracy only in countries that made concurrent improvements to financial reporting enforcement. We show that the improvement in analyst forecast accuracy is associated with the improvement in financial statement-based forecast accuracy around IFRS adoption. We also show that analyst forecasts, particularly for firms whose analysts forecast under favorable conditions (i.e., analysts who are less busy with more experience and resources), have a greater association with financial statement-based forecasts after mandatory IFRS adoption in countries with concurrent changes in enforcement. Furthermore, we document that analyst forecasts, particulary for firms whose analysts forecast under unfavorable conditions (i.e., analysts who are busier with less experience and resources), do not fully exploit the predictive ability of financial statements after IFRS adoption for firms in countries without concurrent changes in enforcement. Finally, we find that the analyst underreliance on financial-statement based forecasts is associated with year-ahead stock returns. These results are robust to controlling for disclosure quality and comparability. The findings are important for understanding the impact of mandatory IFRS adoption on the predictive ability of financial statements, and for understanding analysts' use of financial statements around mandatory IFRS adoption.
Author: Jahidur Md Rahman
Publisher:
ISBN:
Category :
Languages : en
Pages : 18
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Book Description
This study conducts a comprehensive review of the literature published during 1996- 2017 to identify the factors that affect the accuracy of financial analysts' forecasts. We organize our review around three main groups, namely, (a) drivers of analyst forecast accuracy, (b) quality financial reporting, and (c) accounting standards. Among the several factors found, some factors (experience of the analyst, earnings quality, audit quality, IFRS adoption, and annual report readability) have a positive relationship with the accuracy of analysts' forecasts while others (politically connected firms, firms audited by Non-Big 4, and international GAAP differences) have a negative relationship. Our findings contribute to future research by examining the factors affecting analyst forecast accuracy from different perspectives, which will prove to be useful for academicians, regulators, investors, and financial analysts.
Author: Michael H. R. Erkens
Publisher: Springer
ISBN: 3658134410
Category : Business & Economics
Languages : en
Pages : 175
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Book Description
Michael Erkens analyzes the determinants and consequences of information disclosure. He presents an empirical investigation of corporate risk management disclosures of nearly 400 firms from 20 European countries. The results show that countries’ institutional settings and cultural values are predominant factors why firms disclose information on their risk management practices. In another study, the author analyzes the economic consequences associated with the publication of an annual report in English by European firms from non-English speaking countries. He finds that the release of English annual reports attracts more analysts and foreign investors to the firm, and decreases information asymmetries between insiders and outsiders of the firm.
Author: Ran Barniv
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
We examine whether differences between IFRS and U.S. GAAP affect forecast accuracy and other measures of analysts' performance and if analysts with superior forecasting ability are less affected by these differences. Our unique sample consists of resided U.S. analysts who followed cross-listed firms in the U.S. and were unfamiliar with IFRS prior to its adoption but were familiar with U.S. GAAP. The main finding is that firm-specific differences between IFRS and U.S. GAAP and its interaction with our superior analyst variable and other information environment characteristics significantly affect forecast accuracy in the year of IFRS adoption, but this is generally not the case in the subsequent year. We provide evidence that superior analysts gain a comparative advantage in the year of IFRS adoption but the advantage fades out in subsequent years when all analysts are trained and educated in IFRS. Similar effects are generally documented on analysts following and stock recommendations but we find no significant effects on forecast dispersion. We interpret our findings as being consistent with U.S. regulators stating that U.S. analysts will need investments in education, training, and processing the interactive IFRS data and practitioners' predictions that analysts would quickly learn the new accounting standards.
Author: Fotini Economou
Publisher: Academic Press
ISBN: 0128112530
Category : Business & Economics
Languages : en
Pages : 516
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Book Description
The Handbook of Investors' Behavior during Financial Crises provides fundamental information about investor behavior during turbulent periods, such the 2000 dot com crash and the 2008 global financial crisis. Contributors share the same behavioral finance tools and techniques while analyzing behaviors across a variety of market structures and asset classes. The volume provides novel insights about the influence and effects of regional differences in market design. Its distinctive approach to studies of financial crises is of key importance in our contemporary financial landscape, even more so since the accelerated process of globalization has rendered the outbreak of financial crises internationally more commonplace compared to previous decades. Encompasses empirical, quantitative and regulation-motivated studies Includes information about retail and institutional investor behavior Analyzes optimal financial structures for the development and growth of specific regional economies
Author: Uptal Bhattacharya
Publisher:
ISBN: 9789616430258
Category :
Languages : en
Pages : 27
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Book Description
Author: Joanne Horton
Publisher:
ISBN:
Category :
Languages : en
Pages : 57
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Book Description
More than 120 countries require or permit the use of International Financial Reporting Standards (lsquo;IFRS') by publicly listed companies on the basis of higher information quality and accounting comparability from IFRS application. However, the empirical evidence about these presumed benefits are often conflicting and fail to separate between information quality and comparability. In this paper we examine the effect of mandatory IFRS adoption on firms' information environment. We find that after mandatory IFRS adoption consensus forecast errors decrease for firms that mandatorily adopt IFRS relative to forecast errors of other firms. We also find decreasing forecast errors for voluntary adopters, but this effect is smaller and not robust. Moreover, we show that the magnitude of the forecast errors decrease is associated with the firm-specific differences between local GAAP and IFRS. This finding suggests that it is IFRS adoption rather than a correlated unobservable factor that is causing forecast errors to decrease. Exploiting individual analyst level data and isolating settings where analysts would benefit more from either increased comparability or higher quality information, we document that the improvement in the information environment is driven both by information and comparability effects. These results suggest that mandatory IFRS adoption has improved the quality of information intermediation in capital markets and as a result firms' information environment by increasing both information quality and accounting comparability.
Author: Pascual Garrido Miralles
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
This study contributes to investigation into the benefits of mandatory adoption of International Financial Reporting Standards (IFRS) in regard to Spanish GAAP for analysts' earnings forecasts. In a sample of listed Spanish firms we find that mandatory IFRS adoption led to improvements in the quality of the information provided to financial analysts in the post-adoption period. We provide evidence that the benefits of IFRS take time to materialise. We also observe that the expected benefits and costs of IFRS adoption in relation to financial analysts' forecasts were not randomly distributed among Spanish firms. In terms of analysts' earnings forecast error and dispersion after implementation of IFRS, benefits are concentrated mainly in firms audited by the Big 4 audit firms.
Author: Russell James Lundholm
Publisher: McGraw-Hill/Irwin
ISBN: 9780073309699
Category : Business enterprises
Languages : en
Pages : 0
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Book Description
While focusing on the underlying theories of financial analysis and valuation, this work aims to answer the question, "What is this company really worth?". It takes the view that sound forecasts of financial statements are the key input to a good valuation, and that other aspects of the valuation process are mechanical.
